The Wall Street Journal reports government officials seeking to revamp the U.S. financial bailout have discussed spending another $1-2 trln to help restore banks to health, according to people familiar with the matter.
President Barack Obama's new administration is wrestling with how to stem the continuing loss of confidence in the financial system, as it divides up the remaining $350 bln from the $700 bln TARP launched last fall. The potential size of rescue efforts being discussed suggests the administration may need to ask Congress for more funds.
Some of the remaining $350 bln of TARP funds has already been earmarked for other efforts, including aid to auto makers and to homeowners facing foreclosure. The administration, which could announce its plans within days, hasn't yet made a determination on the final shape of its new proposal, and the exact details could change.
Among the issues officials are wrestling with: How to fix damaged financial institutions without ending up owning them.
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